Question

Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 490 $ 2.16 Apr. 20 Purchase 420 2.63 Dunbar sold 570 units of inventory during the month. Ending inventory assuming LIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.) Multiple Choice $1,105. $734. $894. $1,058.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Apr. 1: Beginning inventory of 490 units for $2.16

Apr. 20: Purchase 420 units for $2.63

Dunbar sold 570 units of inventory during the month.

Under LIFO (last-in, first-out) method, the ending inventory is integrated by the first units incorporated into inventory.

First, we need to calculate the number of units in inventory:

Ending inventory in units= total units for sale - units sold

Ending inventory in units= (490 + 420) - 570= 340 units

Ending inventory ($)= 340*2.16= $734.4